Higher demand for BSP bills continues

Published July 12, 2021, 6:00 AM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) noted higher demand for its weekly auction of 28-day BSP securities with P182.21 billion bids versus P158.20 billion last week.

 The bid coverage ratio was up at 1.8221 compared to July 2’s 1.5820.

The P182.21 billion tenders exceeded the offer volume of P100 billion due to sustained strong demand from the market.

The 28-day BSP bills fetched a lower yield of 1.8022 percent, down from the previous auction’s 1.8115 percent. The accepted yield was a range of 1.7950 percent to 1.8086 percent compared to 1.780 percent to 1.825 percent last week.

The BSP restored its power to issue securities in 2019 when the BSP Charter was amended. It launched the BSP securities facility in September last year, giving the central bank more flexibility to manage excess liquidity, and to “deepen the debt paper market”.

The average rate for the BSP bills has declined from 1.8355 percent on September 18 last year when it was first issued, to 1.6683 percent as of mid-February this year. It has since risen back to 1.8000 percent as of last week, consistent with the BSP’s accommodative monetary stance and excess money supply.

The auctions have been mostly oversubscribed since its first offering of only P20 billion. It’s highest offering was P120 billion.

 
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